A mobile phone which doubles as a wallet has come a step closer thanks to a New Zealand-first trial kicked off this week by Bank of New Zealand and Vodafone, along with Visa and Paymark.

The trial involves staff from BNZ and Vodafone in Wellington and Auckland and uses the latest Near Field Communications (NFC) technology, which is fully integrated within the phone itself. Such technology allows everyday payment transactions to take place without having to swipe, insert or even possess a physical card. Instead, payment card data is stored on a secure chip which is embedded into the SIM card inside an NFC enabled mobile phone meaning trial participants can, effectively, replace their card with their mobile phone.

BNZ’s Head of Channels Innovation, Paul Tait, believes the technology being trialled holds great potential for the future of mobile payments.

“What we’re testing here is the viability of a true, mobile wallet that will eventually allow people to replace multiple pieces of plastic with functionality embedded inside their phone. It’s going to make smartphones even smarter,” he says.

The trial differs from other contactless payment methods currently available in that the NFC chip resides inside the phone (instead of in an external case, on a credit card or on a sticker outside the phone) enabling a greater level of integration with the phone itself.

“We’re very pleased to be trialling this innovation in New Zealand, which combines the latest in mobile and banking technology,” says Zac Summers, Vodafone’s Chief Strategy Officer, “Think of what you carry around in your wallet today – credit and debit cards, loyalty cards, building access cards – and imagine most of that functionality on your smartphone. This just the beginning of what we can bring to Vodafone customers.”

Participants on the trial can access an app on their smartphone to view their transactions, which are updated in real time.

Some 44 BNZ and Vodafone staff will be testing this technology on NFC enabled Samsung Galaxy S2 handsets over the next three months.